West Bank Economy Nears Full Crisis as Israel Withholds Hundreds of Millions in Monthly Tax Revenue
Updated
Updated · The Jerusalem Post · Aug 20
West Bank Economy Nears Full Crisis as Israel Withholds Hundreds of Millions in Monthly Tax Revenue
3 articles · Updated · The Jerusalem Post · Aug 20
Summary
Unemployment in the West Bank has climbed to 28% since the Gaza war, as Israeli permit bans blocked more than 100,000 Palestinian laborers from jobs and squeezed Palestinian Authority revenue.
Hundreds of millions of dollars in monthly import taxes that Israel began withholding in May 2025 have hit a budget that depends on that stream for about two-thirds of its projected $6 billion 2026 spending.
140,000 Palestinian civil servants and security personnel have seen salaries cut, schools shortened to three-day weeks, and hospitals and clinics scaled back as the authority piles up billions in debt.
$5.7 billion in shekels is sitting idle in West Bank bank vaults because transfer caps limit payments to Israeli banks, leaving merchants struggling to buy goods and raising fears of a wider banking rupture.
Israel says the measures reflect security concerns after Oct. 7 and rising West Bank violence, while Palestinian officials warn the narrowing financial pressure is pushing the territory toward a full economic breakdown.